Estimated reading time: 8 minutes
Bikes, fitness equipment, furniture, computers, consumer electronics: if you’re currently waiting for an order to be delivered, you might have to wait months – and you won’t be the only one by a long way.
The COVID-induced buying boom in the US and Europe has led to a massive surge in goods being transported by sea from Asia’s manufacturing hubs. Right now, with containers in very short supply in China, many shipping lines are filling their ships with empties on the return journeys to China – simply to satisfy the excess demand for the boxes that carry 90% of global trade. And they’re still operating at a profit, as container rates are, in many cases, ten times higher than a year ago. What is going on?
Besides the obvious frustration of consumers who desperately want to ease their lockdown boredom with the latest Netflix movies on a big-screen TV or work off excess corona kilos on a new exercise bike, there are some more serious side effects of the current buying boom. On routes from Asia to ports like Los Angeles or Long Beach on the US West Coast or Amsterdam and Antwerp in Europe, an above-average number of containers are being lost overboard. According to figures from the World Shipping Council, an average of 1,320 containers a year went overboard between 2008 and 2019. In the past few months alone, there have been 3,000 container losses. In November last, the One Apus lost 1,800 containers in a severe storm with 16-meter waves. In the middle of January, the Maersk Essen reported 750 of the 13,000 containers had been lost in heavy seas. In late February, the Maersk Eindhoven lost another 250. It’s a well-known fact that containers are currently being stacked sky-high to pack as much cargo as possible onto ships bound for the US or Europe. The container shipping lines naturally aren’t complaining because they’re making a bomb in the current boom. Opinions are divided as to whether the usually high losses are due to overloading. But it’s hard to believe there’s no connection. And all these drifting containers pose a real threat to shipping.
On 10 March there were 48 fully laden containerships anchored in San Pedro Bay, southern California. In more normal times these vessels would have docked without delay at Los Angeles or Long Beach, the busiest seaport complex in the US. But right now, containerships carrying those much-wanted goods from Asia’s manufacturing hotspots are having to wait an average of seven days before they can discharge their cargoes. Though COVID-19 infections and fatalities amongst dockworkers in southern California have exacerbated the situation, the backlog is mainly due to the pandemic-induced buying boom. As Gene Seroka, Executive Director of the Port of Los Angeles, points out, there’s so much cargo around he’d need significantly more than 100% of his workforce to cut out delays.
Containers are currently sitting on dock for an average of five more days in the Port of Los Angeles. Two days was the average before the current boom. All the warehouses within 100 km of the two seaports are full up, with containers taking about eight days to get moved instead of the customary three and a half. The impact on US supply chains is clear. As Seroka points out, a small percentage of ships are being diverted to other ports, but he does not expect the southern Californian ports to clear up their backlog before mid-summer.
Greater visibility needed
Industry experts are calling for better communication between seaports and shipping lines to avoid such delays. This would, for example, enable ships to be rerouted at short notice to less congested ports. The advanced ocean freight visibility data provided by Ocean Insights’ Container Track & Trace (CTT) tool allows seaborne containers to be monitored in real time. As the only predictive POL-to-POD ETA tool on the market, CTT can lead to a radical reduction in demurrage and detention charges and cut supply-chain delays. A greater degree of transparency on the part of container shipping lines would also be beneficial in assuaging fears about the increasing numbers of containers lost at sea.